Hyundai Heavy Industries, the world's largest shipyard, said sales last month increased 15 per cent from a year earlier, as it built more vessels at higher prices. Sales rose to 1.2 trillion won (S$2 billion) in November, from 1.04 trillion won a year earlier, the Ulsan, South Korea-based company said in a regulatory filing yesterday in Seoul.
The company received orders valued at US$579 million, 51 per cent more than a year earlier. AP Moller-Maersk, CMA CGM SA and other shipping lines have been ordering more vessels to carry oil, containers and other products as demand for fuel increases and global trade expands. That has benefited Hyundai Heavy and other South Korean shipyards, which have a record order backlog that will keep them busy for more than three years. Hyundai Heavy's sales in the first 11 months increased 19 per cent to 11.25 trillion won. Of that total, revenue from shipbuilding rose 22 per cent to 5.87 trillion won and that from offshore projects gained 24 per cent to 1.67 trillion won.
The shipyard's orders for vessels, engines, offshore projects and other products increased 14 per cent from a year earlier to US$17.9 billion in the first 11 months. Meanwhile, Daewoo Shipbuilding & Marine Engineering, the world's second-largest shipyard, said profit last month tripled, as gains from hedging the South Korean won countered higher steel prices. Net income surged to 34.2 billion won in November from 11.4 billion won a year earlier, the Seoul-based company said yesterday in a regulatory filing. Operating profit in the month plunged 62 per cent to 3 billion won, as the stronger won reduced the value of the company's overseas earnings. Daewoo Shipbuilding is headed for its second annual operating loss on higher costs for steel plates used to make ship hulls and the strengthening domestic currency.
Rising demand for new vessels and increased deliveries helped boost sales 17 per cent last month to 544.6 billion won. The shipbuilder had a one-time gain from currency hedging last month, a Daewoo Shipbuilding spokesman said by telephone, declining to give the amount. The South Korean company and its peers book orders and sales in dollars and report earnings in won. The local currency has increased 8.9 per cent this year, the second-sharpest gain among the 15 most-actively traded Asia-Pacific currencies. January-November orders rose 53 per cent to US$10.6 billion, swelling the backlog to US$22.33 billion, which will help keep the shipyard busy for more than three years. Sales increased 14 per cent to 4.88 trillion won in the period. In the first 11 months, net income jumped 10-fold to 42.8 billion won, from 4.2 billion won a year earlier. The operating loss, or sales minus the cost of goods sold and administrative expenses, widened to 178.1 billion won from 120.1 billion won in the period.